Friday, 7 July 2017

GOLD UNDER PRESSURE DUE TO RISING GLOBAL BOND YIELD ENVIRONMENT


The rising global bond yield environment is keeping gold under pressure; however, the losses are being capped at the weekly 50-MA level of $1218.50 ahead of the US NFP release. 

Eyes US data
The US economy is expected to have added 179K jobs in June compared to 138K jobs in May. US average hourly earnings (due at 12:30 GMT) are seen rising 0.3% m/m in June, compared to 0.2% growth seen in May

A strong wage growth figures could yield another leg higher in the treasury yields and weigh over gold. Note that the metal is oversold as per the RSI on the daily chart, thus weak wage growth numbers could see the metal jump back above the 200-DMA level of $1231 levels. 

Gold Technical Levels
As of writing, the metal trades at $1120/Oz. A break below $1218.50 (weekly 50-MA) would open up downside towards $1214.40 (May low) and $1211.73 (Nov 11 low). On the other hand, breach of $1223.50 (5-DMA) would open doors for $1226 (1-hour 50-MA) and $1229.37 (resistance on 1-hour chart). 


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